I am currently taking business statistics, and along with the current thread about real estate in GD, I now wonder - how accurate are national statistics?
Considering over 10% of the US population resides in California alone, how much does that skew the stats, especially in regard to major indices like the CPI or housing starts? I know (hope) in the real world, more localized and specific data is analyzed - yet if so what is the point of compiling national statistics for a nation as diverse as the US beyong giving the talking heads something to chew on?
How is any type of aggregate data more relevant than non-aggregated localized data? I guess that is my main point. I think there is one buried in there somewhere at least.
Please help me fight my ignorance!
If nothing else, the aggregate data gives you something to compare the local data to.
The national statistics are more useful for looking at trends, both short- and long-term, than as meaningful snapshots of the economy.
Housing starts, median price of homes, number of defaults on mortgages, there are dozens of indicators that may tell people how the overall U.S. economy is doing, and whether the trends are positive or negative. These are extremely useful in helping decision makers guide the economy - whether the Fed should increase interest rates, e.g. - and whether national businesses and banks should make adjustments.
More specific information about localities is obviously important, but that can skew thinking for the opposite reason that you mentioned. California may not be typical of the U.S. as a whole, so national policy shouldn’t be looking just at California but put it into the context of the other 49 states.
IOW, the information you look at is totally dependent on the question that you want answered. Some questions are national, some are state, some are regional, some are local, some depend on income or other factors than area. One of the things you should hope to get out of your course is an understanding of the total range of statistics available so you know what you can apply to each problem you encounter.